Why Obama Needs To Quickly Name A New SEC Commissioner

Securities and Exchange Commission Chair Mary Schapiro will, as expected, be stepping down in January. President Obama already announced that SEC Commissioner Elisse Walter will take her place.

Schapiro’s departure means that the five-member SEC Commission is down to four members: two Democrats and two Republicans. And as Fortune’s Cyrus Sanati noted, that’s bad news for the Dodd-Frank financial reform law:

With the Commission now balanced, it will be virtually impossible for Walter to push through the administration’s agenda, most notably, the implementation of all the rules still left to be sorted out that are part of the Dodd-Frank financial regulatory bill. Turning the massive bill into rules has been a tough slog for the Commission as they have faced strong opposition from Wall Street. The most controversial aspects of the overhaul, like the Volcker Rule, which would limit a bank’s ability to trade and invest its own capital, to the so-called title seven reforms, which overhaul the multi-trillion dollar derivatives market, remain locked in regulatory limbo.

That’s great news for Wall Street as it delays implementation of some of the more profit-killing parts of Dodd-Frank — a delay that many on the Street wish will become the new status quo. The large broker dealers that stand to lose billions of dollars once derivative reform takes place will undoubtedly try to ensure that the two conservatives on the Commission block any attempts to push through title seven. The same goes with the Volcker Rule.

These rules are key to ensuring that the financial system is more stable and secure, as big banks will not be able to take risks that threaten the entire economy. (And there will be a mechanism in place to take those banks apart should they blow themselves up.) Wall Street has been lobbying to slow down those rules — in an effort to kill them off entirely — and having a gridlocked SEC will only help the banks achieve their goal.